Capitalism purports to reward merit. (In our practice, it tends to award just having capital—but ideally it’s supposed to reward merit.) By “merit” we mean some combination of a willingness to work hard hard work and things like talent, strength, and (mostly) intelligence. Roughly paraphrased, smart people should have more money.
For lack of a better alternative, I’m a half-hearted capitalist myself. And, as one of the locker-stuffed, I see some distinct advantages to this system. As a practical matter, distributing resources to the most intelligent might enable the most intelligent people to craft future policy. And we certainly want to incentivise people to act as if they’r eintelligent, whether or not they actually are.
But these practical issues suggest only that we have a strong (or rather, smart) system relative to other systems. They’re sort of might-makes-right justifications. They don’t answer whether we have a good system. Is intelligence-driven inequality just or simply convenient? Would it exist in an ideal system?
In our case, the answer to “why?” is “because it’s the most limited resource.” Imagine a world where everyone went through school and obtained an advanced degree. Who would do construction? Who would pick up the trash? Who would plunge my clogged toilet? In general, there’s a lot of hard work that really sucks to have to do day in and day out. It’s not mentally stimulating. It’s backbreaking work. In order to attract the overqualified, these jobs would have to offer higher wages. But, the problem is self-correcting: why go on to get the advanced degree when you could take a high paying job right away?
This scenario makes a lot of assumptions, so don’t pick on the specifics (Is an advanced degree actually representative of intelligence? Is everyone really equally capable of getting an advanced degree? Are there no people who find working with their hands rewarding? etc.). It’s a textbook thought experiment, though.
Update: If you want an answer more grounded in reality, I can discuss that, but I mostly saw the question as an opportunity to present one of my favorite types of thought experiments (in general, start out with “what if everyone was…”).
